ARR Multiple
What is ARR Multiple?
ARR Multiple calculates the ratio between a company’s valuation and its Annual Recurring Revenue (ARR).
How to calculate ARR Multiple
Example
A company that is worth $100M and earns an ARR of $10M has an ARR multiple of 10X.
More about this metric
ARR Multiple, which divides a company’s worth by its annual recurring revenue, is mainly used to determine how a company’s ARR stacks against its valuation. Investors value companies based on multiple factors including revenue and growth. By calculating the ARR Multiple, you get a good picture of how a company has been valued based on ARR. In general, public cloud companies range between 4X and 9X.
Track this metric
Create a custom metric in PowerMetrics, a free, self-serve analytics tool, to track ARR Multiple and related metrics that matter to you most.
Metrics related to ARR Multiple
Annual Recurring Revenue
Annual Recurring Revenue (ARR) is the sum of all subscription revenue expressed as an annual value....
ARR as a Percentage of Total Revenue
ARR as a Percentage of Total Revenue measures the percentage of your total revenue that comes from r...
Net Annual Recurring Revenue Added
Net Annual Recurring Revenue (ARR) Added is the net change of annual recurring revenue from new logo...